This gold royalty company is beginning to catch up to its larger peers, yet still trades at a buyable level.
Osisko Gold (OR)
From Adrian Day’s Global Analyst
Osisko Gold (OR) is the newest and smallest of the “big four” gold and silver royalty companies. The royalty business model allows companies to benefit from rising precious metals prices without the risks of mining, while having advantages over bullion ETFs since they have leverage to rising prices and pay dividends.
While Osisko is the newest of the large royalty companies, rapid growth from acquisitions and investments give the company 131 royalty and stream assets, of which 16 are currently cash flowing. Most of these assets are in Canada.
Osisko differentiates itself from the other large royalty companies through its “accelerator program”, by which it takes stakes in exploration companies and helps the juniors develop projects, earning a royalty in exchange.
The value of the shares held through these investments is well over C$400 million. That’s in addition to the $405 million in cash. So, Osisko has a solid balance sheet, an experienced management team, a diversified portfolio and built-in growth.
It still has the lowest valuation of the big royalty companies. But it is rapidly catching up, and as it does, the stock will re-rate to the lofty premiums enjoyed by the others.
Adrian Day, Adrian Day’s Global Analyst, www.adriandayglobalanalyst.com, 410-224-8885, December 27, 2017